Gujarat BoardEnglish MediumSTD 12 CommerceEconomicsUNEMPLOYMENT5 Marks
Question
Define unemployment. Give detailed information about its types.
✓
Answer
$1.$ Introduction:
India is facing many types of unemployment even after economic development.
India is still facing the problems of unemployment.
To solve the problems of unemployment, it is very important for a country, to understand the cause of unemployment and to know its types.
$2.$ Meaning of Unemployment:
Unemployment is a situation where a person is willing to work but doesn't get work.
Unemployment is not only a problem of labour but other factors of production can also be unemployed.
But commonly unemployment is seen in relation to labour only so.
We will define unemployment keeping in mind labour.
According to prof. Pigou, "A person can be called unemployed only when he is willing to work but is not able to find work."
According to "League of Nations Committee", "A person who is in search of work, he is capable and talented but is not able to find work. This is defined as unemployed."
In short, from the above definition at current wage rate, a person is eager and ready to work but unable to get work is called "unwilling unemployed" or "Compulsory nature of unemployed".
$3.$ Features $($Characteristics$)$ of Unemployment$:(1)$ If a person is not willing and ready to work and not getting work, then he is not said to be unemployed.
This type of person is said to be voluntary unemployed.
For e.g., Present wage rate per day is $Rs.100,$ and a person demanding $Rs.200$ per day.
$(2)$ Person is ready to work at present wage rate, but he is not capable of having skill to do work that is not called unemployed.
$(3)$ A person is capable strong and ready to work at the prevailing wage rate but doesn't go in search of work is also not employed.
$(4)$ The term unemployment is understood in terms of supply of active work force.
Active work force supply includes people in the age group of $15$ to $64$ years.
Children, elderly people and people who do not want to work, and are not part of the active work force, cannot be said unemployed.
$(5)$ An unemployed person is economically dependent and cannot live in society with dignity.
Problem of unemployment is not only an economic problem but create social and ethical problems.
Political field also creates chaos. The whole country is unrest.
$4.$ Nature of Unemployment$:[A]$ It is necessary to know the nature of economy while discussing the nature or types of unemployment.
The nature of unemployment is different in both developed and developing countries.
In a developed countries, lack of effective demand resulted in cyclical unemployment.
Mostly in a developed country, there is cyclical and frictional unemployment.
This type of unemployment is short term.
It can be removed by creating effective demand.
Cyclical unemployment is related with business cycle while frictional unemployment is associated with change in technology.
$[B]$ To know the nature and types of unemployment, Shri Raj Krishna has given four measures:
$(i)$ Time:
A person is willing and has capacity to work but does not get work for more than $28$ hours a week, he is said to be intensively unemployed.
A person employed for more than $28$ hours and less than $42$ hours in a week, they are considered as less intensive unemployed.
$(ii)$ Income:
When a person gets very little income by which he cannot solve the problem of his poverty, from that income point of view, he is poor.
In rural areas in India, this type of poverty is seen.
$(iii)$ Willingness:
When a person is capable of getting work, but does not get job as per his/her capability and he gets another lower grade jobs and he gets very less income then he is unemployed.
$(iv)$ Productivity:
When a labourer is working with less than his actual productivity then production is less than his productive capacity. For e.g. A person has a capacity to produce $5$ shoes in a day, but he can get work to produce 3 shoes a day.
$5.$ Types of Unemployment:
According to the measuring rod, unemployment can be divided in following ways:
$(1)$ Open Unemployment:
"A person who is ready to work at current wage rate and possesses qualification too, but does not get any job is called open unemployment."
Features:
$(1)$ As there is increase in labour supply and the process of urbanization is at fast pace, then high rate of full unemployment is seen.
$(2)$ This type of unemployment is found more in urban area than in rural areas.
$(3)$ Most of the people of rural areas migrate to urban areas in search of jobs.
$(4)$ People those who are educated or less trained / unskill person suffer from this type of open unemployment.
$(5)$ Open unemployment is a reason for reduction in output and productivity, because this type of but people cannot work and they cannot get work, such people consume goods and spend. Savings become less, economic development rate becomes dull.
Hence they become a burden. Open unemployment is seen more in the age group of $15$ to $25$ years.
Open unemployment measurement:
It is difficult to find out exact basis of open unemployment.
This type of unemployment is measured by three ways:
$(1)$ Through registration in employment exchange centers.
$(2)$ Through sample survey for labour supply.
$(3)$ Through population census e.g. In India every $10$ years population counting is done. In this population census all information about unemployment is mentioned.
Limitations:
$(1)$ Most of the employment exchange centers are found in urban areas but the unemployment which is found in rural areas is not counted as there are no employment exchanges there.
$(2)$ There is no job guarantee by employment exchange centers so they do not do their registration for job.
Some individuals those who got job at some better place they do not go and cancel their names in employment exchange centers.
By this system exact, data is not available about unemployment.
$(2)$ Under Unemployment:
When labourers are not fully utilizing their energy for work, they are called under unemployment.
In other words, an individual who has accepted job for certain period of time, the work is low as per his qualifications and skill such type of individual is said to be under employed.
When a labourer is willing and ready to work for certain years or days but get job for less than those hours or days then he is said to be unemployed.
In rural areas of India such type of seasonal or under unemployment is found.
During sowing and harvesting time of crops such type of employment is seen in farmers.
Other half of the years, they remain unemployed.
Indian agriculture is based or monsoon and due to limited irrigational facilities, agricultural sector faces seasonal nature of unemployment.
When the educated skilled person has to accept job below its qualifications that person is called under unemployed.
E.g. M.Com qualified person has to do job of peon so he is under unemployed.
$(3)$ Disguised Unemployment:
In an over populated country like India such type of Disguised unemployment is mostly found.
This type of unemployment is called hidden unemployment.
In a developing country such type of unemployment is found.
Prof loan Robinson, Prof. Nurkes, Prof. Arthur Lewis, the economists gave the concept of disguised unemployment in a developing country.
That how disguised unemployment concept can be theoretical used for economic development.
Meaning:
"If too many persons are employed at the given level of technology in an activity and when a few persons are removed from work, the total production does not change, then there exists disguised unemployment.”
Prof. Ragnar Nurkse view "If labourers are removed to another sector, without reducing prevalent production, production in other sector can be increased. Thus disguised unemployed are implied savings."
E. g. In a $10$ hectare land, $7$ persons are working and producing 100 quintal grains.
If $2$ persons are removed from the work than only $5$ will remain busy in working and the production of grains remains the same.
Here $2$ laboures are disguised unemployed.
Their contribution was nil and marginal productivity was zero.
In India population is increasing.
So that labour unemployment is also increasing other side agriculture sector is undeveloped, so; agriculture unemployment is more.
In agricultural activities only farmer's family is involved and they have on other source of income.
So disguised unemployment is found more in agricultural sector.
In urban areas industrial sector and $HUF ($Hindu Undivided Family$)$ type of unemployment is commonly found.
$(4)$ Cyclical unemployment:
In capitalist developed countries, cyclical unemployment arises due to fluctuations in opportunities of employment on account of speculative trends of market.
E.g. If the economy is passing through the economic boom, opportunities for employment and production increase. As a result, few people remain unemployed.
On the contrary, if the economy is passing through depression, factories are closed, production decreases and opportunities for employment is also decreases.
People have to remain unemployed in large number.
Such employment is connected with phases of cycle of trade.
If the economy based on market system, we often find such unemployment based on depression in economy.
In $1929-1930,$ there was Great Depression and its effect was seen in many countries that is why it is known as Greatest Depression of the world.
America, England, Europe, etc. many developed countries are still facing unemployment problems. India is also globalized so whatever effects the other countries have, it is directly affect on India.
so cyclical unemployment is seen in India.
The commodities which are demanded at international level in that sector unemployment is found.
E.g. Diamond industry in India.
Cyclical unemployment is for short time period.
To solve such unemployment many state level manufacturing and developmental programmes investment is done, Job opportunities are created for unemployed individuals.
As they get income opportunities their income increases.
In whole economy, demand for commodity grows with increase in production demand for employment will increased.
By this way cyclical unemployment problem will be resolved.
$(5)$ Frictional unemployment:
In developed countries, usually due to lack of effective demand short term friction unemployment comes into existence.
When old technology is replaced by new technology and new technology is often capital dominated, less number of labourers are required.
Thus, the unemployed workers have to try to find jobs in other fields.
They have to acquire new skills through training.
Thus, the time during which they have to remain unemployed is called frictional unemployment.
E.g. Due to computerization the clerks will not be required in large numbers as before.
Due to new inventions, either demand for certain commodities increases or decreases.
Therefore, labourers move to the unit which has more demand from the unit with less demand.
For a short period, they have to remain jobless.
E.g. When smart phone replaced old mobile phones then the labourers engaged in production, sale and service of old mobile phones become unemployed.
This is frictional unemployment.
Need a full question paper?
Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.